China to the rescue. After a headline grabbing opening of over 72 points down ,some sanity prevailed as buyers stepped back in to the banks in particular and National Australia Bank Limited (A$32.34, +0.6%) especially. At the end of the day we were nursing a graze rather than a head wound, despite the eye catching earlier headlines of $20bn wiped off the market. Down 24 for the day thanks to PMI. I do despair on the media! Resources also got a kick up as Chinese Flash PMI came in at a fraction over 50 which indicates expansion. Fortescue Metals Group Ltd (A$4.26, +4.2%) and Origin Energy Limited (A$12.98, +5.8%) were the stand outs today after their numbers but industrials like Brambles Limited (A$8.70, -5.2%) were a fail. Financials were mixed as National Australia Bank Limited (A$32.34, +0.6%) and Commonwealth Bank of Australia (A$71.26, +0.2%) continued to draw fans whilst QBE Insurance Group Limited (A$15.97, +1.3%) bounced after their recent blooding and the others were generally easier. Energy shares were also in the red today as oil eased led by Woodside Petroleum Limited (A$37.72, -1.0%) and Santos Limited (A$14.46, -1.9%). In the big hitters BHP Billiton Limited (A$35.37, -1.0%) and RIO Tinto Limited (A$59.04, -0.9%) both fell but the free fall was turned into a bungy jump post the Chinese numbers and Fortescue Metals Group Ltd (A$4.26, +4.2%) results. Consumer staples were easier with Wesfarmers Limited (A$39.21, -1.1%) suffering from post div blues while Woolworths Limited (A$33.51, -0.5%) held up better.
Golds were back on the nose a little as Newcrest Mining Limited (A$12.40, -1.0%) eased and others got belted like Evolution Mining Limited (A$0.905, -5.7%),Beadell Resources Limited (A$0.81, -3.6%),Silver Lake Resources Limited (A$0.96, -3.5%),Kingsgate Consolidated Limited (A$2.45, -0.8%) and Regis Resources Limited (A$3.90, -3.9%) all very volatile.
Stocks in the green today by a country mile included Ardent Leisure Group (A$1.82, +7.7%),AWE Limited (A$1.36, +6.3%),Slater & Gordon Limited (A$3.42, +5.2%),Origin Energy Limited (A$12.98, +5.8%),Seven West Media Limited (A$2.45, +5.6%),Ten Network Holdings Limited (A$0.31, +6.9%) and GWA Group Limited (A$2.90, +5.5%) whilst in the bad boy club were Magellan Financial Group Limited (A$10.60, -9.2%)(after Jamie sold last night),Atlas Iron Limited (A$0.835, -10.2%),Pacific Brands Limited (A$0.79, -7.6%),Resolute Mining Limited (A$0.93, -7.9%) and Medusa Mining Limited (A$2.50, -8.1%) plus Cabcharge Australia Limited (A$4.12, -7.4%) and Brambles Limited (A$8.70, -5.2%).
Volume was better again as results drew players off the sidelines but still somewhat disappointing given the volatility and results season.
Asian markets were mixed to rubbish as the Chinese numbers were overlooked although Japan did do better than the more peripheral markets like Jakarta and KL down around 1 or 2% but the Philippines which has been closed for three days due to flooding was whacked a big 6%!
Stocks in the News-Results round up
Fairfax Media Limited (A$0.585, +0.9%) That’ll do donkey, that’ll do. Not too bad at all really. Market also seemed to like it as cost cutting and debt reduction are front and centre. Also it seems that the Digital divide is working with subscribers ahead of expectations. Reporting a $16.4 million loss for the year, Fairfax said trading in first six weeks of this financial year “saw a slight moderation of previous trends, with year-on-year revenue down 8 per cent on the comparable period.” The result includes a non-cash impairment charge of $444.6 million.
Fortescue Metals Group Ltd (A$4.26, +4.2%) Twiggy will be pleased. Reporting a net profit of $US1.74 billion. The result is easily better than the $US1.56 billion underlying net profit after tax that analysts were expecting and has allowed Fortescue to pay a 10 cent dividend to shareholders. Good news but no sign of infrastructure sales. Maybe the urgency has passed given the rise in the Iron Ore price.
Brambles Limited (A$8.70, -5.2%) Brambles has reported a net profit of $US640.6 million, up 14 per cent in constant currency. The logistics group said new businesses helped boost earnings amid subdued and uncertain economic conditions.
It posted a final dividend of 13.5 US cents, up from 13 US cents, to be paid on October 10.
ASX Limited (A$35.12, -1.4%) Derivatives seemed to have saved the day at the exchange operator ASX which posted a 2.7 per cent increase in full-year profit after trading volumes climbed.
Net income in the 12 months to June 30 rose to $348.2 million from $339.2 million a year earlier, in line with market expectations. Trading volumes of equity derivatives and interest-rate futures increased.
Cabcharge Australia Limited (A$4.12, -7.4%) cut its dividend from 18 to 12 as competition heats up in the taxi space. Go goCatch and Uber! It reported a small increase in statutory profit, up 1 per cent to $60.6 million. Revenue increased 2.2 per cent to $196.6 million. Revenue from taxi service fee income moved marginally higher to $90.7 million.
Atlas Iron Limited (A$0.835, -10.2%) Nasty! Seems the buzz word in resource stocks this hunting season is impairment. These guys were impaired too. The narrow underlying loss of $500,000 sank to a final loss of $245 million once asset write downs were accounted for. Still paying a 3 c dividend though!
Origin Energy Limited (A$12.98, +5.8%) Market liked these numbers today as Heavy discounting and customer losses slashed more than $200 million off Origin Energy’s earnings in the year to June, with the discounting to continue to drag on earnings in the year ahead. Origins’s net profit slumped to $461 million in the year to June, down from $1.06 billion a year earlier.
Sydney Airport (A$3.82, unch) turns out these guys don’t need all those pesky retail or food outlets. Just more parking as car-parking revenue posted the biggest jump – rising from $56.4 million to $63 million – during the half, outpacing both retail, and property and car rental, as sources of income.
Few more out today but that is enough to digest at one sitting I think!
Tomorrows News Today
Bundesbank chief Jens Weidmann was vexed with comments emerging that Greece may need yet another bailout and the break up of the Euro. Who would have thought that. The vexing ,not the bailout that is, we all know where this one is going again! Greece, which has already received around €240bn (£204bn) in rescue money since 2010!More?More?
It is the West’s chance to get a up close and personal look at what happens behind the paper curtain as one of China’s former pin up boys goes on trial. Bo Xilai is accused of taking bribes of around $3.6m and embezzlement amongst other things. I would have though trying to was like pointing a speed camera at a Formula One driver at Albert Park.
And more from China as (N)everbright President Xu Haoming resigned from the brokerage that roiled Chinese stock markets last week with erroneous buy orders. So long suckers and thanks for the fish!
Jackson Hole will be the focus as Central Bankers from around the Globe will descend for a talk fest. Shame the big three aren’t going to be there. First time that a Fed Chief has missed it in 25 years as “King Carney” and “Super Mario” find something more important to occupy their time. Not sure what could be more important than saving the world though.
Spare a thought for Indians looking to holiday overseas as their currency has taken another hit. The Indian rupee has fallen to yet another record low, dropping past 65 to a US dollar, after the Federal Reserve minutes hinted that the United States may start tapering its stimulus as early as next month.
Expect HP to be in hot sauce today as the results after hours on the street were nothing to write home about and revenue forecasts binned. Hewlett-Packard reported fiscal third-quarter earnings excluding items of 86 cents per share on revenue of $27.23 billion. While earnings met Street forecasts, revenue was a bit below the $27.29 billion analysts were modeling. For the full year, HP sees adjusted EPS of $3.53 to $3.57. The company also announced a shakeup in its executive ranks.